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Pepcap Ventures Inc. Executes Letter of Intent for a Proposed Qualifying Transaction with JMC Corporation Ltd. HK

Jul 11 2013 12:00AM

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CALGARY, ALBERTA -- (Marketwired) -- 07/11/13 -- JMC Corporation Ltd HK. ("JMC") and Pepcap Ventures Inc. (TSX VENTURE: WAV.P) ("Pepcap" or the "Company"), a capital pool company, are pleased to announce that they have entered into a letter of intent dated July 9, 2013 (the "LOI") to complete an arm's length business transaction. The Transaction shall serve as the Company's Qualifying Transaction, as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange") and is subject to the approval of the Exchange.

Pepcap is expected to own directly or indirectly 51% of certain energy assets within Indonesia (the "Properties"). The sale price is expected to be approximately $4,170,000 payable in common shares of Pepcap at a deemed value of $0.10 per common share (the "Transaction").

Under the terms of the LOI, Pepcap will own a controlling interest in mining concessions in Sumatra, Indonesia consisting of two blocks, held by PT. Krida Darma Andika. The Properties consist of 3 coal concessions that are located in Napal Putih and Putri Hijau districts of North Bengkulu Regency of Bengkulu Province, Indonesia. The Viking coal project divides 3 coal concessions into 2 coal blocks:

-- Block I (1,907 Ha) consists of 2 IUPs for 650 Ha and 1,307 Ha, located in Napal Putih district.-- Block II (7,236 Ha) consist of 1 IUP, located in Putri Hijau district.



"We are very pleased with this transaction as it will allow Pepcap Ventures to pursue its planned growth strategy in the natural resources sector", stated Clark Swanson, Chairman of Pepcap Ventures, Inc. He continued, "We are also fortunate to have attracted a wonderful group of high calibre mining executives to help aid with this endeavor."

The Qualifying Transaction

Pepcap is incorporated under the provisions of the Business Corporations Act (Alberta) with its registered and head office in Calgary, Alberta. It is a capital pool company and intends for the Transaction to constitute its "Qualifying Transaction" as such term is defined in the policies of the Exchange.

Concurrently with execution of a call option agreement held by JMC, a company incorporated under the laws of Hong Kong, JMC will facilitate transfer of 51% of the total issued and outstanding shares of Asia Mining Management, B.V., a Netherlands limited liability corporation, to Pepcap. Asia Mining Management (herein, "AMM") is the owner of PT. Krida Darma Andika, a company recognized as a PMA (Penanaman Modal Asing), a limited liability company, legally approved for foreign direct investment by the Indonesian Investment Coordinating Board.

The LOI is to be superseded by a definitive agreement in principle (the "Definitive Agreement"). The Transaction is subject to requisite regulatory approval, including the approval of the Exchange, and standard closing conditions, including the approval of the directors of each of JMC and Pepcap of the Definitive Agreement and completion of due diligence investigations to the satisfaction of each of JMC and Pepcap, as well as the conditions described below.

Since the Transaction is not a non-arm's length transaction, Pepcap is not required by the Exchange to obtain shareholder approval for the Transaction. Trading in the common shares of Pepcap has been halted. It is unlikely that the common shares of Pepcap will resume trading until the Transaction is completed and approved by the Exchange.

As a condition of the Letter of Intent, Pepcap has agreed to advance a $25,000 non-refundable deposit to JMC, in accordance with Section 12.2(i) of TSX-V Policy 2.4.

At closing, it is expected that the resulting issuer will change its name to Veyron Resources Inc. or such other name as the parties may agree to.

It is expected that upon closing, Pepcap will meet at least the Tier 2 standards of a mining issuer and be listed as a Tier 2 mining issuer on the TSX-V. In connection with the transaction, Pepcap has commissioned a National Instrument 43-101-compliant report for the Properties.

Conditions to Transaction

Prior to completion of the Transaction (and as conditions of closing):

-- JMC and Pepcap will enter into a Definitive Agreement in respect to the Transaction.-- The parties will prepare a filing statement in accordance with the rules of the Exchange, outlining the terms of the Transaction.-- All requisite regulatory approvals relating to the Transaction, including, without limitation, Exchange approval, will have been obtained.



Board of Directors and Management

Upon completion of the Qualifying Transaction, the directors and senior officers of Pepcap are anticipated to be:

Clark Swanson - Chairman

Mr. Swanson is currently President and Director of Blackline GPS, Inc., a publicly traded company listed on the TSX Venture Exchange for which he has raised over $23 million. He joined the board of directors in October, 2007 following a private financing which was led by Mr. Swanson and served as their President & CEO beginning in 2009. As of 2010, Blackline was ranked by IDC as one of Canada's Top 10 Companies, and in 2013 it was ranked #73 fastest growing companies by Profit Magazine. Mr. Swanson also currently President & CEO of Pepcap Ventures, Inc. a CPC on the TSX-V exchange. Mr. Swanson earned a degree in Economics from Pepperdine University, and graduated with an MBA from the Graziadio School of Business and Management with distinction. He is a frequent guest lecturer at the Graziadio School of Business & Management, in addition to extracurricular activities of business advisory focused on Canadian capital markets, manufacturing, mining, and oil and gas. Mr. Swanson is a resident of the United States.

Claus Andrup - President & CEO

Claus Andrup has over 30 years of experience in venture capital, primarily in the resource sector, and has been instrumental in the formation, financing and development of a number of public and private corporations. He has worked with and managed junior companies engaged in the development of base and precious metals projects and a number of oil and gas plays. He has played a pivotal role enabling a variety of resource development debt and equity financings. He has been a founding principal and director of Western Wind Energy Corporation (TSX V), an independent producer of electricity operating in the South Western US and Puerto Rico. In 2007 Mr. Andrup founded Oretech Resources Inc. that has optioned the Condor Resources gold/silver Becker project in Chile. In early 2010 Oretech combined its business with Hedger Capital Corp. and trades on the TSX-V as Pinestar Gold Corporation. He has also been a founder director of capital pool corporation Greenbriar Capital Corporation. In 2012 became a founder director of capital pool corporation PepCap Ventures Inc., a company engaged in identifying, acquiring and operating coal projects in Indonesia. Mr. Andrup is a resident of Canada.

Edward Rochette - Director

Edward is an internationally known negotiator and transaction specialist with over 30 years of acquisition experience in international business, land management and natural resource transactions. He is currently serving as the CEO of East Asia Minerals Corporation (TSX) which has major exploration projects in Indonesia and Mongolia, and is assisting the efforts of Forbes & Manhattan (a Toronto based Investment Bank) as their country manager in Mongolia. Previously Edward was the Executive Senior Vice-President, of Ivanhoe Mines Ltd., a publicly traded copper and gold mining company with its head office in Vancouver, B.C., Canada, where he was on an international posting, from1991 to January 2006. At Ivanhoe, he was the person responsible for negotiating, acquiring and managing the exploration and mining rights in almost all 12 of the countries in Asia, all of North and South America, and various countries in Africa and Central and Eastern Europe, as well as establishing the on-shore and offshore corporate entities, conducting the negotiations and joint ventures and the closing of various transactional agreements with the highest levels of government in each of these countries. This includes the negotiation of the Monywa joint venture agreement with the Government of Myanmar in 1994, and the acquisition of the world class Oyu Tolgoi copper project in Mongolia from BHP for $5million which is now worth $30 billion. Mr. Rochette is a resident of Mongolia.

Chandra Reddy - Director

Mr. Chandra Reddy is the Managing Director of Beyond Advisory and a former partner in the law firm Rotstein Lockwood Reddy. Beyond Advisory enables businesses in the Asia Pacific region and Indian sub-continent to identify and capture commercial opportunities which lie beyond their borders. The core focus of the company is organizing project teams that deliver financial and strategic advice on green field, expansion and diversification projects to a cross section of businesses and organizations. As a founder of Beyond Advisory, Mr. Reddy has comprised a team of various high caliber business identities who have expertise in media, retail, telecommunications, technology, entertainment and law and who have achieved commercial success in India, China, Singapore, Sri Lanka and Australia. Mr. Reddy has previously occupied numerous senior legal positions including: Acting Group General Counsel for Allianz Australia Ltd, Head of Legal & Compliance for the Business Insurance division of GIO General Ltd and Compliance Counsel for Telstra. Mr. Reddy is a resident of Australia.

Dr. Saliba Sassine - Director

Dr. Sassine is an experienced director and company executive. He is Chairman of S&A Capital Pty Ltd (a predecessor of BlueMount Capital), a boutique investment and origination group specializing in resources, energy and renewables. S&A Capital has now transformed into a Commodities Broking and Facilitation House, focusing on thermal coal, coking coal, iron ore and other steel commodity inputs.

Dr. Sassine has held Chairman or CEO-level positions in a number of listed and privately held companies and has directed and advised on start-up and early stage enterprises at pre- and post-IPO. He has also worked as a senior ministerial adviser to the West Australian government on state and national advisory boards and committees. He is a Senior Associate Member of the Securities Institute of Australia. He is Chairman of the Perth Theatre Trust, Chairman of the POWA Institute, and Chairman of the board of the WA Academy of Performing Arts. He holds a PhD and Bachelor of Economics with First Class Honours. Mr. Sassine is a resident of Australia.

Sponsorship and Private Placement

Concurrently with closing, the parties will complete a private placement of a minimum of $500,000 and a maximum of $1.5-million into the resulting issuer. Further details regarding the Private Placement will be provided in a subsequent press release.

Additional details on the transaction will be announced in a subsequent news release once the definitive agreement has been executed, pursuant to the requirements set forth in Section 12.2 of TSX-V Policy 2.4. Trading in Pepcap's common shares on the TSX-V is halted and will remain halted until the transaction has been completed or the letter agreement is terminated.

ON BEHALF OF THE BOARD OF DIRECTORS:

Clark Swanson, President, Chief Executive Officer and Director

This press release contains forward-looking information. More particularly, this press release contains statements concerning the prospective Qualifying Transaction of the Company. The information about JMC Corporation Ltd HK and the Properties contained in the press release has not been independently verified by the Company. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct.

Forward looking information involves known and unknown risks, uncertainties, assumptions (including, but not limited to, assumptions on the performance and financial results of the Properties and completion of the financing) and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The terms and conditions of the prospective Qualifying Transaction may change based on the Company's due diligence on JMC Corporation Ltd HK and the Properties, the entering into a Definitive Agreement for the Qualifying Transaction, regulatory and third party comments, consents and approvals and the ability to meet the conditions of the required timeframes. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Investors are cautioned that, except as disclosed in the management information circular, filing statement or other continuous disclosure document to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.



Contacts:
Pepcap Ventures Inc.
Clark Swanson
President, Chief Executive Officer and Director
(310) 754-6580





Source: Marketwire